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Due to the high ratio of foreigners to Andorrans in the Principality, the Govern d'Andorra has introduced selective methods of admitting new residents into the country. Residence permits, called residencias, are available to applicants, retired or otherwise, who have an address in the Principality and who genuinely wish to reside in Andorra and become an active member of the community. The applicants must be in possession of a private income sufficient that he/she need not seek remunerative employment within the Principality. Once the applicant has been accepted, his residencia is issued for a period of one year, renewable after the first year for a period of 3 years. Applying for a residencia is a fairly lengthy procedure and must be conducted in the official language, Catalan.

Applications for residencias are handled by the Immigration Department of the Police.

Each application is considered independently following guidelines dictated by the current legislation on residents passius.

Anyone spending over 183 days in any calender year in the country is by default a resident and is expected to apply for a residencia. A resident is therefore understood to reside in the country for at least 183 days in any calender year.

A resident must have a bona fide address which may not be an hotel or post box.

Someone who is not officially resident is by default a tourist. A tourist may own a property in Andorra and enjoy it for a period of up to 183 days per year. This rule has not been strictly enforced in the past and there is at present no active policy of checking people in and out of the country.